A customer data platform (CDP) is an exciting new category of technology that has gained a lot of attention in recent years. In fact, just last summer, IDC forecasted the global market for CDPs to grow to $3 billion by 2025.
Despite that growing adoption, quite a few clients and contacts are still asking us what CDPs are used for within a business.
So, in this article, we’ll explain exactly what a CDP is, how it works, and how it could play a key role in the future of your own business.
Today, more and more of your business is taking place online than ever before, and the majority of our interactions and relationships with our customers are now digital-first.
That means you’re dealing with data, and lots of it.
Whether that’s transactional, behavioural, demographic, or anything in between, we’re collecting an overwhelming amount of complex data through a multitude of digital channels on a daily basis. The problem is, with all those different channels and platforms capturing customer data, you’re going to have some disparity when it comes to how you process, analyse, and action that data.
With so much noise and competition online these days, it’s crucial you’re taking advantage of every possible detail available to build relationships with your target audience. If you want to reach your prospects and customers, and engage them enough to move them through your marketing funnel, you need to be as personalised, targeted, and relevant as possible.
Of course, the more you grow, the more fragmented and challenging this will become. This is where the need for a customer data platform, or what most call a CDP, has emerged.
According to Gartner:
“A customer data platform is a marketing technology that unifies a company’s customer data from marketing and other channels, to enable customer modelling and to optimise the timing and targeting of messages and offers.”
Essentially, a CDP is a platform that enables you to improve your relationship with your prospects and customers by using their data as the foundation of all your marketing and communications.
This is a sophisticated software solution that compiles both known and unknown data sets into a central database, allowing you to maximise the performance of all your marketing tactics and strategies.
It’s a highly effective way to bring together all the data you’re capturing from various sources like web, mobile, point-of-sale, product, third parties, and more, and organise it in the most efficient possible way. CDPs also include data management capabilities, in-built multi-channel campaign automation tools, as well as advanced levels of personalisation and targeting.
A CDP provides your marketing team with a central location to manage all customer data, while also enabling the management and execution of all activity and campaigns.
This involves unifying all your various customer data from all sources, including:
Known data – For example, if a customer makes a booking or purchases something via your website, all the personal and transactional data they submit will be stored in your CDP, then organised into various segments. From there, you can make data-driven decisions about how you engage that customer in future, based on variables like whether they’re a new or existing customer, what type of booking or purchase they’ve made, how loyal they are, and so on.
Unknown data – For example, a visitor to your website who doesn’t become a customer can still have their activity tracked by capturing cookies from their visit. Your CDP will collect this data and build a customer profile or match it to an existing entry in your database. Once you’re able to match this to a contact, the CDP will allow you to target them based on past behaviour, like what areas of your site they’ve visited, as well as providing marketing offers to them based on their location, and so on.
You’re also able to use a CDP to set up automated, multi-step, multi-channel campaigns, to manage communications across an entire customer journey, but personalised to specific personas or audience preferences.
By implementing a CDP, you can significantly enhance the functionality of a standard marketing cloud and create additional capabilities, such as:
Get in touch and we’ll help you understand if it’s right for your business
The main outcome of implementing a CDP is that you’ll gain simple, efficient orchestration of highly sophisticated marketing campaigns directly informed by comprehensive sets of customer data.
Obviously, that brings with it plenty of great opportunities to grow your business, while improving the retention and loyalty of your existing customers as well.
With the recent global shift towards digital-first, multi-channel relationships with our customers, especially since the COVID-19 lockdowns, the importance of targeting and personalisation are at an all-time high.
Your customers now expect products, services, and communications tailored to their preferences. People’s attention spans are also shorter today, with more choice of brands to purchase from than ever before, as they’re constantly being bombarded with content and promotions from all angles.
With that in mind, your best chance of being effective with your marketing is by leveraging your customer data to make your strategies more intelligent and customer-centric. It’s essential to connect with your customers on a deeper, more meaningful level in order to be successful today, and a CDP makes that far easier to achieve.
To quote IDC’s Director of Marketing and Sales Technology Research at IDC, Gerry Murray:
“The pandemic put a premium on customer data. Brands suddenly realised that they cannot effectively present new ways to engage and transact without a holistic view of every customer. The notion that siloed customer data is a competitive disadvantage is now mainstream, as is the risk associated with regulatory and industry changes in non-first-party customer identifiers.”
Additionally, by leveraging automated tools and processes, a CDP can provide a number of benefits to your business internally as well:
A CDP is a very useful tool which is understandably gaining more traction as our relationships with our customers continue to become increasingly digital-first.
This new technology allows you to leverage the insights gained from analysing customer data, to inform your marketing strategy and tailor your efforts across all channels and platforms. We’ve seen plenty of companies driving growth by using a CDP to create high-quality, fully automated marketing campaigns tailored to each individual customer.
If you feel your business could benefit from this level of customer engagement, it may be worth taking a further look into CDP solutions sometime in the near future.
A CDP is an exciting and innovative new solution, but like every type of technology, you need to take a measured, strategic approach to implementing one within your own business.
If you have any questions or would like to learn a bit more about CDPs, don’t hesitate to reach out and we’d be happy to talk through it with you.